Lots of people want to tell you how to start a restaurant- no surprise in an industry as big as the food business and one where there are literally hundreds of billions of dollars spent.
The problem comes when you get advice from someone with a particular angle who doesn’t appreciate there is more than one way to get to the same end goal.
I will break down some of the points offered here and add to or the positions he takes on what is required to be successful in this business. And keep in mind, I’ve done very well in the business and I didn’t do all of what he says, either!
Tyson Cole, one of the Food Wine magazine’s 2005 Best New Chefs, 2011 James Beard Foundation Best Chef Southwest, and co-owner of the Japanese restaurants Uchi and Uchiko in Austin, Texas, for tips for would-be restaurateurs.
Here’s what he says, in his own words, about how to start a successful restaurant:
1. Never start without the big three. No restaurant succeeds without a great chef, a great location, and a great concept. They all work together. Your location should fit your concept. Your chef, or “talent,” must fit your concept, otherwise you’ll constantly deal with the most common word in the restaurant business: Drama.
Some entrepreneurs say, “Well, location doesn’t matter because I’m going to create a destination restaurant.” In my experience, people say that when they have a bad location. It’s hard to become a destination if you don’t start with a great location.
Accessibility is everything. The more accessible you can make your restaurant, both in terms of location and in a broader sense, the greater your chances of success. Look at the most successful restaurants: They’re the most accessible in terms of location, brand, and price point. Fast casual restaurants are booming because they’re incredibly accessible on all levels.
I agree with location and concept but the chef part is optional. I mean, you don’t have to walk very far out your door to find restaurant success that doesn’t involve a chef (Hello- McDonald’s- never had a chef, never will- worth billions!).
In fact, the hottest category right now, the fast casual sector, doesn’t involve chefs. Yes- you must come up with a good menu and you may want help from a chef in doing it- but that doesn’t mean you need a chef working for you full time in the kitchen.
In fact, having a “chef” kind fo restaurant your first time out may be more of a risk than offering lower cost food may by cooks. The bottom line however is your concept. If your concept is right, and you find a location that works with your concept (which doesn’t have to be expensive or big, just “right”) then success is much more likely.
2. Always overestimate your capital needs. Plan on having six to nine months of working capital from the start. You’ll be surprised by how quickly the expenditures add up and how much time it takes for a new place to grab hold and get legs/regular customers.
Many new restaurants see a major downswing in business after the opening’s initial excitement. That’s when capital is critical. When I started Uchi I brought clientele with me, but even so there was a gap after the first few months. We had to wait to see if the restaurant would really catch on.
A lot of restaurant owners start out with cash in reserve and start blowing it because they think the honeymoon phase will last forever. That’s why most restaurants go out of business. Never let initial success go to your head. Success is only determined years later.
Don’t fail to estimate your capital needs correctly would be a better way to put it. And don’t spend money on the wrong things (interior design eats up way too much of most budgets) and don’t spend money when you should be spending time instead. Time spent planning your restaurant, researching and coming up with solid restaurant financials based on doing your homework is going to prevent a lot more failures than simply trying to draw the biggest pool of funding you can get.
4. Never be cheap where guests are concerned. The most important money you will spend is money that adds value to the guest.
I definitely made mistakes early on, especially when I tried to go cheap on certain things like equipment, valets, and even desserts. That was short sighted, because everything that touches a guest is important.
Determine a percentage of your revenue to put into improvements that affect the guest and constantly enhance their experience. At Uchi we don’t spend money on advertising or marketing but we run a very high level of comps. We give away gift cards and send a lot of complimentary dishes to tables.
Guests love when a dish comes out and the server says, “The chef wanted you to try this,” because that creates a real connection and makes the experience personal.
Make sure you spend as much money as possible on the guest experience. Spend money on the people already in your restaurant, because that’s the best way to generate genuinely positive word of mouth.
I agree you should spend money to create an amazing guest experience. I don’t agree most restaurants should plan to spend nothing on marketing. That works in a few rare cases but by and large you want control over the message getting out and bringing new people in beyond just the crowd that wanders through the door on their own.
5. Focus on organization and systems of operation. Failing to put systems in place is one of the biggest mistakes an independent restaurant owner makes. I have an amazing partner, Daryl Kunik, and that was more of his realm.
Many restaurant owners don’t want to come off as corporate; to them, the “C” in the word “corporate” is like the Scarlet Letter. To embrace systems would be like selling out and becoming a chain.
I feel the opposite. There’s a reason chain restaurants thrive: Every one of them started as an individual restaurant. Each had a great chef, a great concept, and a great location, and they developed systems that enabled them to build guest demand, hold on to key people, and make money. Otherwise it would have been impossible to open two locations, much less 200.
Organization doesn’t kill the flow of creativity. Putting outstanding systems in place gives you the freedom to be creative.
This point I completely agree with- systems are everything. Chaos is no way to run any business and it will take its toll in lost profits, burnout, low morale and ultimately the demise of the business one way or another. If you aren’t sure how to make this work, start with this book.
6. Be ready to evolve, especially if you’re a chef. Many businesses are started by a craftsperson with an idea for a product. Rarely does that idea become anything unless that person partners with someone with a complementary ability, like, “You carve wooden bananas and I can sell them for you.” That’s when an idea becomes a business. I have great ideas, but without someone like Daryl, Uchi would have never succeeded.
Now as a restaurateur my focus is almost solely on people and communication. It was hard for me to say, okay, while I’ll always be a chef, I’m not going to be in my kitchen all the time. I’m going to teach and delegate instead. Once I embraced that I was able to do so much more. That was my tipping point.
Always look for people who are smarter than you. As a business owner the smartest thing you can do is partner with people who know things you don’t—and then give them a reason to care.
Partnering can be a double edged sword. While it is great to find someone to complement your skill, I am firm believer you should have at least a working knowledge of every aspect of your business.
One, because the old saying “trust, but verify” is a good one to keep in mind- not all partnerships work out; and two, because should something ever happen to your partner or partnership you don’t want to be left in the dark trying to learn everything all at once under enormous pressure.
